By Joseph Adinolfi, MarketWatch

Investors brace for a series of Treasury auctions later in the week

Treasury prices rose on Monday, pulling yields lower, as investors looked for more clarity on President Donald Trump's fiscal-policy plans.

The yield on the 10-year Treasury note shed one basis point to 2.457%, while the yield on the two-year note fell 1.6 basis points to 1.176%. The yield on the 30-year bond shed 1.5 basis points to 3.032%.

With a relatively light earnings calendar and Federal Reserve policy makers observing a blackout period ahead of their Feb. 1 policy decision, investors will focus on signs of Trump's legislative priorities for his first 100 days in office, as well as a series of Treasury auctions, said Ian Lyngen and Aaron Kohli, fixed income strategists at BMO Capital Markets.

"Whether President Trump hits the right tones for the market and implements policies to get investors more excited is the biggest question in relation to the trajectory of rates," they said in a research note published Monday.

Specifically, investors will be watching for clues about Trump's fiscal policy plans, including corporate tax cuts, infrastructure spending and deregulation, which are expected to stoke accelerated growth and inflationary pressures.

Following a dramatic postelection selloff, Treasury yields, which move inversely to prices, have drifted lower in recent weeks as investors who were hoping for more details about the scope and timing of Trump's fiscal policies were repeatedly disappointed, market strategists said.

The downcast tone of Trump's inaugural remarks also rattled markets, driving a "risk off" bid in global equity and bond markets, market strategists said.

"People were expecting some level of detail in the inauguration speech and there was virtually nothing," said Bruno Braizinha, interest rate strategist at Société Générale.

Typically, bond investors demand a higher yield when they expect a rapid uptick in inflation during the life of the bond, reasoning that higher consumer prices erode the real return on their investment.

The Treasury will auction a total of $88 billion in new two-, five- and seven-year notes this week. Investors will be watching the auction for signs of robust international demand, represented by the level of interest from so-called indirect bidders--a loose proxy for foreign bidders.

(END) Dow Jones Newswires

January 23, 2017 08:35 ET (13:35 GMT)